A former OnLive employee (who spoke on the condition of anonymity) described to GamePolitics the last meeting the cloud-based subscription gaming service will ever hold. Earlier in the day this source confirmed a rumor that the company had laid off its entire staff and ceased to exist as a company.

First, our source describes the meeting where employees learned that they had all been let go:

"So there was an 'All-Hands' and we're in this big open space.. he [referring to OnLive founder, CEO, and president Steve Perlman] literally had a presentation that he pitched to us and the punch line was '…and under this variation of bankruptcy which is valid in California the company as of this moment does not exist and portions of it are being acquired by a brand new entity but what that means is all of your options are gone.'"

"The most surreal part of the whole meeting is that he does the entire presentation, he gets to the end and typically at an 'All-Hands' meeting you clap, right? Because that's just the right way to finish a meeting. I think because nobody knew how to react, everybody clapped. It was bizarre... because you're clapping to thank him for taking the easy route out of the company. I think it was because everybody was in such shock that they just didn't know what to do. So I'm sitting there laughing because I'm watching people clapping because they don't know what else to do..."

When we asked our source if anyone inside the company saw today's events coming, they said:

"Anybody keeping score within the company knew that money was getting tight. There were signs of it because budgets had been slashed and there were very long holds on getting business terms signed off on... but the expectation was "oh Steve's going to go and get another round of funding. There were a few people hoping for the acquisition because that's really the end game, but if you were reasonably smart you knew that the likelihood of that was pretty low."

We asked if anyone was getting a severance package from OnLive:

"No. we just got paid for the first half of August. We got 8 hours for the couple of hours we worked into the second pay period. We got our PTO." One thing that is lost under the bankruptcy is contributions to Federal Savings Accounts that employees made: "A lot of my colleagues put money in the FSA for child care, health care, whatever .. they did not have an answer for us, but it sounds like the person that makes the most noise will get reimbursed."

We asked our source what the aftermath of today's news is to employees, and if any of OnLive's employees will be carried over into the new as-of-yet-unnamed entity:

"There were few people who had been given a one-month agreement with the new entity, which he did not explain. basically by using this form of bankruptcy there's a certain amount of protection from the creditors... obviously he lands okay and everyone else is on their own."

Finally we asked our source how many people are going to this new company from OnLive:

"A very small number.. I have no idea what the number is, but i would guess that a few people would stay to keep the service running because if you lose the content the value drains out of the company very rapidly. So they must be keeping enough people around to keep the service running. He'll keep around his core engineering team and people's he's worked with for years I'm sure are staying... and the one guy who knows how the analytics database works for financials (he does all the reporting and everything so) I'm certain he has a position. I'd guess 20 people.

I hate most cloud services like OnLive so honestly, this comes as a happy surprise for me.

The concept of OnLive sounds pretty cool and it sucks for everyone involved but the services have to many issues and are horribly expensive to maintain.

There exists two major issues with cloud-computing as it is right now: Security and reliability.

If I can't have access to a service when I want it then I'm going to hate it. Since most "always online" services require heavy maintenance then downtime is inevitable at some point and any amount of downtime is pretty damn horrible.

I hate news like this, and I feel bad for the people out of a job tonight.

but I have to say this.

I called this when onlive was first announced.

For all it's good intent and purpose, it was doomed cause the Infrastructure and support for this just, doesn't exsist in the US. other nations, maybe it might have had a chance, but in the US, and especially with the exsistance of steam and origin, ment that "Play games remote" Was doomed cause Steam sells the games, for download, on your computer, for a flat, often discounted fee, and you OWN IT, done, no subscription, no nothing.

While I admire Onlives intent, it was the Wrong service, Wrong Place, Wrong time.

heres hoping the Ouya, which has a Gazillion dollars in kickstarter money, might be able to take Onlive and run with it, but to be honest, i think theres a better thing for Ouya.

Make Ouya Steam compatible, and they essentially have a MILLION GAME LIBRARY out of the gate.

1) Ouya didn't buy Online. Onlive was just coming to the Ouya in its current form. Ouya has no more ability to "run with it" than you or I.

2) Steam is not available for Android devices. Even if it was, there would not be "MILLION GAME LIBRARY" because there are currently no games sold through Steam that are compatible with Android devices let alone the Ouya.

3) All the money Ouya got through the Kickstarter is going right into making the Ouya consoles for the Kickstarter. They have $0 and 0 cents left to do crazy things like buy Onlive, or completely reformat the device to play PC games.

I am glad you're excited about the Ouya, I am too. But you are really setting your expectations for the console way to high.

You know... this and well - a friend of mine and myself were going to watch a movie the other day. So he goes to play the movie he bought off of Blockbuster's site. However; it appears their DRM servers were no longer online.

Blockbuster wouldn't do anything to correct the DRM lockout on the digital file, nor would they offer it for streaming.

I don't think.... I'm too interested in any locked digital content anymore - or content that requires a connection to some company's servers - it's too easy for them to give the customer the shaft and more or less rip them off.

So.. for now on - for me - no physical media / independent digital file - no deal.

Number one reason (other than accessibility) is why I hate being forced into using Steam to play a game (and so many damn games use Steamworks now) or the idea of any cloud-based services where everything is on anothers servers.